Members of the LGBTQ + community believe they should save an average of 20% of their annual salary for retirement, compared to 15% for the general population, according to a investigation published this week by Lincoln Financial Group.
LGBTQ + respondents are also more likely to have increased their pension contribution rate in the past year, and 45% said they followed their investment performance more closely in the past year.
“Our research shows that LGBTQ + consumers are actively engaged in planning for their retirement and in managing their finances in general” Jamie Ohl, president of Lincoln Financial Group workplace solutions, operations and branding, said in a statement.
“And despite the market volatility and uncertainties all Americans have faced this year, this community has not put its financial future on hold, instead focusing on long-term goals to achieve the retirement it envisions.”
Lincoln Financial conducted an online survey from February 19 to March 18 among a total of 2,535 full-time workers: 2,030 pension plan members and 505 non-members.
Employers can help
Despite their increased focus on retirement planning, research from Lincoln Financial found that LGBTQ + consumers still have financial problems. Fifty-three percent said they feared they would never be able to retire, compared with 39% of the general population.
Lincoln Financial said the sentiment could be driven by LGBTQ + respondents’ desire to save a higher percentage of their annual salary than the general population to reach that milestone. It could also mean that the community needs a better understanding of what is needed to feel more confident to achieve financial security.
Employers could also play a more active role, he said.
As an example, Lincoln Financial mentioned a provision of the Secure the act This has made it easier for plan sponsors to come up with a pension plan design that can generate guaranteed income for retired plan members.
Therefore, employer sponsored pension plans can become more than a vehicle for accumulation; they can provide an income stream in retirement, so that participants have the potential to receive income regularly for the rest of their lives.
The survey found that 54% of LGBTQ + savers are interested in an income solution in the plan, compared to 46% of the general population.
“The safe income products built into the plan can be a powerful protection tool during times of volatility, while also benefiting savers when the market rises,” said Ohl.
In addition to their financial concerns, community members continue to face discrimination in the workplace and in housing, two recent studies find.
Stress Hits Wallets
Forty-seven percent of LGBTQ + respondents said they had experienced significant stress in the past six months, compared to 36% of the general population.
Additionally, 69% said stress negatively affects their ability to manage or improve their personal finances, compared to 60% of the general population.
How to deal with the financial stress created by the pandemic? Ohl recommends that all savers have a clear picture of their current situation.
A good place to start, she said, is with a financial well-being program that many employers offer to their employees. Savers can use these tools to create a personalized action plan to improve their financial well-being and achieve their goals.
“By better understanding our customers and the communities we serve, we can focus on innovation in our customer experience, products and services, to ensure that we are helping more people achieve financial security,” said she declared.